Bernanke vows 'appropriate' steps

With Wall Street watching intently, Federal Reserve Chairman Ben Bernanke on Friday vowed to take “appropriate and effective responses” to revive a weakening economy, but did not commit to using the Fed’s balance sheet to buy more securities as a way to boost growth, as some economists had hoped.

“I think we would all agree that, for much of the world, the task of economic recovery and repair remains far from complete,” Bernanke said, speaking in closely followed remarks at an economic conference in Jackson Hole, Wyo. “In many countries, including the United States and most other advanced industrial nations, growth during the past year has been too slow and joblessness remains too high.”

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Bernanke spoke just hours after the Commerce Department substantially downgraded its estimate of second-quarter gross domestic product growth — to 1.6 percent from an initial reading of 2.4 percent — indicating the economy is close to slipping back into recession and underscoring Democrats’ political peril heading into the midterm elections in November.

“Four consecutive quarters of economic growth is positive news, but the revised numbers mean there is still much more we need to do to continue on the path to recovery and that remains the focus of the president and the economic team every single day,” said deputy communications director Jen Psaki. “President [Barack] Obama is focused on taking the next steps to keep the economy growing, including assistance to small businesses, export promotion, the extension of tax cuts to the middle class and investments in areas of our economy where the potential for job growth is greatest, like clean energy.”

The downgrade was the latest in a raft of poor economic data this week on housing, employment and growth, but Obama has been largely silent while on vacation in Martha’s Vineyard, Mass. He is expected to kick off a series of high profile, economic-themed events when his vacation ends next week.

The president “will, of course, be very focused on the economy and what we can do to make it stronger, keep moving in the right direction,” White House deputy press secretary Bill Burton told reporters Thursday. “He’s been getting updates on some of the different indicators that you’ve seen coming out on the economy, and he’s going to sit down with his economic advisers obviously at some point and talk to them as well.”

Obama will speak on the economy next week after he returns to Washington, administration officials said Friday, but the White House has not yet determined the details.

Administration officials have stressed throughout the president’s vacation, as plummeting housing market figures and other negative economic indicators emerged, that Obama is paying close attention.

Burton said Obama is “focused every single day on the economy,” adding that he’s received multiple briefings with economic advisers while on Martha’s Vineyard and will meet with his economic team next week.

Meanwhile, Bernanke is under pressure to use somewhat unorthodox tools at his disposal to assist the economy. Traditionally, the nation’s central bank reduces its target for short-term interest rates to encourage lending and economic growth, but rates are already near zero, and the bank has pledged to keep them there for the foreseeable future.

But the Fed’s toolbox also includes so-called “quantitative easing,” or using its balance sheet to purchase treasury bills, as well as securities backed by mortgages and other assets in order to increase the flow of credit into the financial system.

When will the Prez address his sorry economy? For Gods sake I don't mean another Tues night prime time speech. How embarrassing for him it will be this Tues speaking about something that happened two weeks ago. Golf first, then us..

Considering that printing money ("quantitative easing") is the only bullet they have left, and considering that the Chinese almost certainly told Turbo Tax Cheat Geithner to not even THINK about it, I'd say that we are, Boys and Girls, at the inflection point of the socialist welfare state. We are, in other words, about to take our medicine for 80 years of unsustainable statism.

The answer, friends, is to look not to career politicians or the Federal Reserve for a solution. The answer is to put people in Congress who understand that every dollar that we spend must be a dollar that we have. It will be hard; it will entail some short term suffering; but we've been there before and we've survived.

Americans know what to do. News reports are that families have paid down their credit card debt on average by 13%. That is good for the individual. Even though interest rates are low, people are careful what they are spending their money on. THAT'S A GOOD THING!

Obama Obama Obama Obama Obama . This same name keeps popping up with all the troubles of the American economy. I wonder why? He has 5.5 million dollars in his bank account but I guess that does not make him RICH since he is a Democrat. Only Republicans are rich. Besides no Democrat makes over 250K a year as we all know otherwise they would have to be known as RICH and RICH are evil under Obama (Except for himself and other Democrats of course). THE FIX TO THE ECONOMY DOES NOT REST WITH BERNANKE. What it takes for the econmy to recover is very simple for everyone except Democrats. Make small business BELIEVE that government is not going to tax them out of existence and then PROVE TO THEM that government is not going to pass laws that trade American small business earnings for votes. Make small business BELIEVE that our government is not going to force them into bankruptcy to give their assets to unions for votes, make small business believe that our government is actually going to remain capitalist and not become socialist communist and take away small business hard earned gains to give to the 38% that suffer from liberalism disease. Make small business believe that politicians are going to write laws that apply to politicians as well as to everyone else. This is a partial list of what it will take to get our economy going again. Bernanke is just another politician that dances to the tune of the party in power and he can espouse all of the "fixes" he wants but it isnot in his power to fix the American psyche that has been severely damaged by Democrats under the control of Obama. American business have no confidence in Obama and his party and very little in the Republicans. Are the Democrats smart enough to reject all that they have done under the "spell" of Obamaism. I doubt it. The national media will not let them. Will Republicans step up and perform with another chance. With the same old leadership who knows. The national media will be against them. When the 62% that work hard and contribute to America get the idea that there is no hope for America as it has been known then 100% of American entreprenurial spirit will be dead. Government cannot take what is not there in the first place to give to the 38% for votes.

What growth is Jen Psaki talking about? What planet is the president and his staff on?

Maybe the fed chairman is finally wising up. The private sector needs time to pay down debt. This takea a lot of time to do. Unitl this happens no one is going to spend. The public sector needs to do the same.

It certainly looks like President Obama has been addressing the sorry economy he was given by Bush. And if the Party Of No hadn't delayed those economic programs for so long, the economy would likely have been looking even better by now.

Considering that printing money ("quantitative easing") is the only bullet they have left, and considering that the Chinese almost certainly told Turbo Tax Cheat Geithner to not even THINK about it, I'd say that we are, Boys and Girls, at the inflection point of the socialist welfare state. We are, in other words, about to take our medicine for 80 years of unsustainable statism.

Another term for this is to "monetize the debt". This is what 3rd world countries do when they get too far in hock to their creditors.

That is why the Chinese told Turbo Tim to not go there...because if the U.S. dollar continues to be devalued, eventually not even the Chi-Coms.

Bernanke knew this when he discontinued the "quanitative easy" in the Spring. Going back to it was a very bad sign.

The solution to the problem does not reside with Bernanke. He's out of bullets, and the one he is using now --- printing money --- is a very bad thing to do if he does it in a big way.

The solution lies in reinvigorating the private sector where all wealth is generated and the only place where wealth producing jobs come from. Each and every government job only consumes wealth otherwise created in the private sector. Time for some imagination that does not involve massive new government spending to get the private sector going again.